Tankless water heaters offer substantial energy savings and generate less waste than conventional water heaters. A tankless energy saving water heater can be as much as 34 percent more energy-efficient than a standard conventional water heater. And Energy Star estimates that a family of four can save $95 or more per year or or $1,800 over its lifetime, on their gas bills compared to a standard gas water heater. Of course, there are other benefits to consider as well.
Tankless water heaters have a life expectancy of more than 20 years.—much longer than a traditional heater, which will typically last from 10 to 15 years. They also have easily replaceable parts that extend their life by many more years.
Also, tankless water heaters are much smaller than tank heaters and can be mounted on the wall freeing up space for storage or other uses.
So you ask what is the downside of going tankless?
The greatest downside would be the cost. Expect to pay two to three times more for an energy saving tankless water heater and installation.
Another downside may not be as simple as swapping out a conventional tank for a new tankless one. Gas piping, meter and line may not be sized correctly for a gas tankless heater, or you may need a capacity upgrade to your electrical system. It is important for the unit to be installed properly for it to perform well and not be a potential safety hazard.
Things To Consider:
Cost of Upgrades: Proper voltage, circuit breaker, equipment and venting needed.
Location and Size: Tankless heaters are much smaller than tank heaters. The location of the tankless water heater affects its efficiency. Ideal locations ensure that water remains hot even during the coldest season.
Life Expectancy: A tankless heater to last 20 years or more—twice as long as a conventional tank heater.